As you know, a troubled G7 summit was held in Italy's Sicily last week. Following the meeting, it came to light that these seven countries - Canada, France, Germany, Italy, Japan, the U.S. and the U.K. - had a severe quarrel instead of reaching an agreement, and the European Union criticized the U.S. for its stance on climate change. Actually, this contentious summit reminded us that G7 meetings, which had been "quietly" held for a long time, were continuing.
Bringing together the heads of states and governments of seven developed countries, G7 summits have been held since the mid-1970s. The group emerged as a platform of compulsorily bringing together developed countries with the motive of making them supervise and manage the world trade cycle against the joint restriction of the Soviet Union and China's political and economic domination in Europe, Asia and Latin America and against a possible market shrinkage during the Cold War period.
With the disintegration of the Soviet Union in the 1990s, the group both became redundant and lost its efficiency as a result of the fact that Asian and Latin American countries quickly became integrated into the system. In other words, the G7 formally survived, but it grew into the G20 with the involvement of developing countries.
Now, these seven developed countries meet and hold summits, however, what they do does not go beyond a poor theatrical show. They address issues such as world trade, climate change, refugee crises and terror in every meeting, however, all these topics are reflected in world public opinion as basic conflicts and breaking points at the end of meetings. Of course, they quarrel and leave summits without making any decisions.
G7 summits benefit us all in one aspect; through these summits, we come to know the basic conflicts and current states of Europe, the U.S. and the U.K., as well as the profundity of their crises and wars on the markets. And the Sicily summit produced interesting results in this regard.
For instance, everyone attributes the squabble between the U.S. and Germany to President Donald Trump's impulsive behavior. Of course, however, this is not true. Trump criticizes Germany for running billions of dollars of surplus in countertrade, grabbing the market share of the U.S. in sectors such as the automotive industry and undermining industries that create basic employment.
Apart from this, the euro, the common currency of the EU, seems much more competitive than the dollar. In fact, the problem with the euro is that southern European countries think that it is valuable, but Germany thinks that the euro's value is low. And Germany's Chancellor Angela Merkel knows it. Prior to the G7 summit, Merkel responded to the U.S.'s criticism that Germany horribly exploits the U.S. and its partners in the EU thanks to the low euro, saying: "We have at the moment in the eurozone of course a problem with the value of the euro. The ECB [European Central Bank] has a monetary policy that is not geared to Germany, rather it is tailored [to countries] from Portugal to Slovenia or Slovakia. If we still had the [German] deutsche mark it would surely have a different value than the euro does at the moment."
Certainly, it is debatable whether Merkel's argument that things would be different if the mark were used is a satisfying answer. As Merkel suggests, the current value of the euro hardly benefits countries like Portugal, Slovenia and even Italy. This is because the euro must decline further for these countries to join world trade. However, the euro is low for Germany. So, Germany kills two birds with one stone here. First, thanks to a common currency at this value, it prevents productivity within the EU and countries smaller than itself from keeping pace with world trade and carrying out exports by pushing them to the brink of an abyss and making them a satellite of itself. Actually, the U.S. and the U.K. object to this. Secondly, it hits economies like the U.S. and Japan through the euro, which has competitive value against the dollar.
Here, the only problem for Germany is Turkey. If Turkey continues with a lira that finds its real value outside of the eurozone, it may threaten Germany's market domination in the medium term. Therefore, Germany plays upon instability in Turkey.
On the other hand, the situation for the U.S. is becoming clear. Since Trump took office, he has claimed that he would bring unemployment in the U.S. to pre-crisis levels, reinvigorate sectors that create basic employment such as the automotive industry and minimize foreign trade deficits. This means Trump has a hugely different economic approach than previous Republican presidents, especially George H.W. Bush and George W. Bush, who used to resolve the U.S.'s external deficits through seigneurie right, namely through the dollar supply relying on political power. Here, the U.S. economy's level of borrowing, external deficits or budget and savings-investment deficits did not matter, as the U.S. could manage the dollar, a world currency, as it wanted. But now Trump sees things will not go like this.
In this sense, contrary to the perception that is being created, Trump is one of the most intelligent U.S. presidents ever, who can understand the period he is in. He is afraid of Russia in terms of politics and of China in terms of economy. So much so that, although his enthusiasm for developing good relations with Russia is true, he has gotten into a trouble as a result of shaking some balances. However, the U.S. had already needed to do so. Therefore, I do not think Trump will resign before completing four years in power.
Meanwhile, U.K. Prime Minister Theresa May has decided to go for an early election as she wants to lead the process in a stronger way, foreseeing that the fat is in the fire.
As for Turkey, Turkey is seeing the scuffle among the developed countries of the past very well. We know that Germany is shifting toward its pre-World War II position, and therefore, it supports terror and instability in Turkey, and the number of pro-Nazi people in the country is increasing. However, Turkey will move on its path by further strengthening its economy and democracy through current and future reforms.
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